First Horizon National Corp. said Tuesday it will consolidate its two retail brands — First Tennessee and Capital — under its corporate name this fall.
The Memphis, Tenn., bank spent $2.2 billion to buy Capital Bank Financial Corp. of Charlotte in December 2017. Capital shareholders own 29% of First Horizon’s common shares.
When the deal closed, First Horizon chose to maintain the Capital Bank brand outside Tennessee.
Capital, based in Miami and Raleigh before moving to Charlotte in 2016, entered the Triad in 2012 through buying a struggling Southern Community Financial Corp. of Winston-Salem and its 22 branches for $52.5 million.
First Horizon said the brand consolidation also involves FTN Financial becoming FHN Financial and FTB Advisors to First Horizon Advisors.
“Aligning our businesses under our First Horizon brand now represents much more than a name change,” Bryan Jordan, president and chief executive of First Horizon, said in a statement.
“It represents our renewed brand promise — we understand that our customers have their own financial horizons and can rely on us to deliver on their individual needs and aspirations.”
The brand transition involves an advertising campaign, signage change at branches and corporate buildings, and on customer communication channels.
First Horizon’s red-white-and-blue star logo will be retained, “but with an updated style.”
“A good brand name should be suggestive without being descriptive,” said Roger Beahm, executive director of the Center for Retail Innovation at the Wake Forest University School of Business.
“The name Horizon itself has a somewhat positive, emotional feel to it (e.g., a place to aspire to, a destination to be achieved).
“This compares to Capital, which is not terribly warm and welcoming, and Tennessee, which clearly evokes an image of the 16th state to join the Union.”
Beahm said Horizon also has what he calls extensibility, meaning “it can it be stretched across a broad range of products, services or entities.”
“The fact that the company is in wealth management, as well as well as capital market services and regional banking, makes First Horizon a better umbrella to use over its broad portfolio of companies, rather than either the words Capital or Tennessee might suggest,” Beahm said.
In a separate regulatory filing, First Horizon said it will take asset impairment, infrastructure expenses and other charges in the second quarter related to the re-branding.
“Although First Horizon is committed to re-branding ... (it) has not yet made several implementation decisions which are likely to affect the overall costs of the initiative,” according to the filing.
Those pre-tax charges include: non-cash re-branding impairment expenses of $8 million; and non-capitalized expenses related to re-branding in fiscal 2019 between $15 million and $20 million.
The non-capitalized expenses will also include “anticipated branch closures, severance and associated professional fees.”
First Horizon said it would take a 3-cent earnings charge in the second quarter.
Chris Marinac, research director for Janney Montgomery Scott LLC, said Wednesday he maintains his earnings projections of 39 cents for the second quarter and $1.50 for fiscal 2019.